SRN: 150281016
Spreadsheet Assignment Report
Software: Microsoft Excel 2016
Hardware: ASUS K401U Laptop
Printer: HP OfficeJet Pro 8720
I work part-time as a manager of Genesis Games, Serangoon. This is basically a cyber
caf located in a heartland area of Singapore. I have realised that the number of
customers we receive fluctuate throughout the year, possibly due to upcoming
examinations for students, holiday periods and various other factors. Our competitors
(other cyber cafes in the area) usually give discounts during the months when there are
lesser customers. To remain competitive, we have decided to embark on similar
discount promotions. I have created this spreadsheet to aid me in setting an appropriate
rate of discount while maintaining reasonable revenue. This report will explain how I
achieved this endeavour as well as elaborate on the Excel tools used.
In total, the spreadsheet I created consists of 3 sheets: Sales Data, Parameters and
Goal Seek, Income Statement. I will be referencing these sheets throughout my report
for added clarity.
To begin, I created a sheet (Sales Data) and added every transaction from a past year
to it.
(Sales Data sheet)
The above is a small excerpt of all the transactions that have taken place for the year
2017. As I intend to start the promotion in 2017, that is the year I have used for the data
simply for analysis. The data has been taken from the sales figures of 2016.
The rate for usage at the cyber caf is $1.60 per hour and a full hours usage is charged
with no pro rata.
The cell for the rate for usage is 'Parameters and Goal Seek'!$C$8.
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SRN: 150281016
Total collected before promotion, refers to the amount of money collected from a
transaction before implementation of any discount and is 'Parameters and Goal Seek'!
$C$8*[@[Hours Used]].
I have categorised every month with an alphabet corresponding with the type of
discount to be offered for that month. This has been done based on my personal
experience with regards to which months experience lesser revenue.
There are 3 types / tier of discount which are: A, B, C.
Tier A - no discount will be given, this is usually a month with high customer stream
Tier B - a percentage discount will be given
Tier C a percentage discount derived from the amount of discount given for
Tier B, Tier C; B X 1.25.
A table of the individual months and their respective promotion tiers is on sheet
Parameters and Goal Seek and presented below.
(Parameters and Goal Seek, Listed in Array A18:C30)
The next step would be to add the columns for Promotion Tier, After Promotion and Cost
of promotion to the Sales Data.
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In order to assign a promotion tier to all the transactions in the Sales Data sheet, I used
the INDEX MATCH formula: INDEX('Parameters and Goal Seek'!
$C$19:$C$30,MATCH([@Month],'Parameters and Goal Seek'!$B$19:$B$30,0))
The MATCH formula looks up the relevant row for the applicable month based on the
promotion tier listed in sheet Parameters and Goal Seek, array A18:C30.
The INDEX formula looks up the relevant Promotion Tier based on the row returned by
the MATCH formula.
Using the first entry as an example, the applicable month is July. Based on this, the
MATCH formula returns the value 7 which corresponds with the value A (looked up
by the INDEX formula) listed in the array C18:C30.
The columns for After Promotion refers to the amount of money collected after
applying promotions, if applicable. As we have yet to ascertain the percentage discount
to be given thus far in the report, please assume this column to be blank for now. Cost
of promotion would be the amount of money in dollars discounted from a transaction
and is to be assumed blank for now as well.
In order to figure out a suitable discount rate, I first had to create an Income Statement
sheet. This is to aid in the calculation of revenue and expense so as to arrive at the sum
of my earnings before interests and tax (EBIT). The Income Statement Sheet is shown
on the next page of my report. Only with the sum of my EBIT as well as the sum of my
total expenses, can I find out my percentage EBIT which is expressed against total
expenses.
As I have mentioned earlier, the purpose of this spreadsheet is to aid me in setting an
appropriate rate of discount while maintaining reasonable revenue. With respect to our
business model, a reasonable EBIT% would be 15%. With this figure in mind, I have
used the Goal Seek tool to find the perfect percentage discount to be given. Please
bear in mind that the Income Statement sheet contains values for the discounts and that
these values only came about after using the Goal Seek tool. Rest assured, I will be
elaborating in the later portion of the report as to how I went about using the Goal Seek
tool.
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(Income Statement, Listed in Array A1:O20)
Total Revenue is a summation of Total collected before promotion for each month,
SUMIF('Sales Data'!$B:$B,C$2,'Sales Data'!$D:$D).
Less Promotional Discount is a summation of Cost of promotion for each month,
SUMIF('Sales Data'!$B:$B,E$2,'Sales Data'!$G:$G).
Total Revenue after promotion is calculated by subtracting Less Promotional Discount
from Total Revenue.
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Rental, salary and office supplies are fixed expenses. Water usage at the cyber caf
has little to no relation to the amount of hours used by customers and is given a value of
$200 every month. Electricity on the other hand is a variable depending on the amount
of hours used, hence Utilities is a summation of $200 + Hours of Service provided X
0.025. Maintenance is also a variable expense as after many hours of usage,
computers tend to require servicing and repair and I am representing this by Hours of
Service provided X 0.05.
In order to give discounts and yet maintain an EBIT% of 15, the Goal Seek tool is used.
We use the Goal Seek tool to adjust the base discount rate (Tier B discount) in order to
achieve our EBIT goal of 15%.
First, go to the Parameters and Goal Seek sheet and create a table as shown below.
(Listed in Array B4:D12)
The cell for Total EBIT is 'Income Statement '!C19.
The cell for EBIT% is 'Income Statement '!C20.
Next, click on the Data tab on the top of the user interface. Then click on What-If
Analysis and select Goal Seek
After which, set cell as $C$5 which is the EBIT%. Next, key in To value as 15, the
EBIT% we want to achieve. Then, By changing cell: to $C$11, the discount rate for
promotion tier B.
This will give us the discount rate of 18% for months we ought to give tier B discounts.
As mentioned earlier, tier C discounts are 25% more than tier B discounts. Hence, we
have solved the fore mentioned issue and found out what is the ideal rate of discount to
give each month in order to carry out our promotion.
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I have come to the end of my spreadsheet assignment report. Thank you for your
time and attention.
